Does Dickeys Barbecue Pit have the option to purchase the assets of my business upon termination of the franchise?
Dickeys_Barbecue_Pit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise or Other Agreement [Article in Franchise Agreement/ Article in Development Agreement] | Summary [Items shown in plain text depict summary from Franchise Agreement / Items shown in italicized text depict summary from Development Agreement] | |
|---|---|---|---|
| your obligations and new developer satisfies Dickey's requirements for a developer. | |||
| n. | Franchisor's right of first refusal to acquire franchisee's business | Article 15/ Article 7 | Dickey's can match an offer for the franchisee's business./ Dickey's can match an offer for the developer's business. |
| o. | Franchisor's option to purchase franchisee's business | Article 17/ N/A | Dickey's has option to purchase the assets of your business upon termination of the franchise./ Dickey's does not have any such option. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 77–84)
What This Means (2024 FDD)
According to Dickeys Barbecue Pit's 2024 Franchise Disclosure Document, Dickeys Barbecue Pit does have the option to purchase the assets of a franchisee's business upon termination of the franchise agreement. Specifically, Article 17 of the Franchise Agreement outlines this option. This provision is only applicable to the Franchise Agreement and not the Development Agreement.
This means that upon termination of the franchise, Dickeys Barbecue Pit has the right, but not the obligation, to buy the franchisee's business assets. This could occur if Dickeys Barbecue Pit believes the location is valuable or if they want to maintain control over the market.
For a prospective franchisee, this is an important consideration. While it provides a potential exit strategy, it also means that Dickeys Barbecue Pit could dictate the terms of the sale. It is important to understand the conditions under which Dickeys Barbecue Pit might exercise this option and how the purchase price would be determined. A franchisee should seek legal counsel to fully understand the implications of this clause.